(Bloomberg) — BlockFi Inc. filed for bankruptcy, the latest crypto company to collapse following the rapid collapse of crypto exchange FTX.
Most read from Bloomberg
BlockFi said in a statement that it will use the Chapter 11 process to “focus on recovering all obligations owed by its partners to BlockFi, including FTX and related corporate entities. ”, adding that recovery may be delayed due to the bankruptcy of FTX itself. Chapter 11 bankruptcy allows a company to continue operating while drawing up a plan to repay its creditors.
The lawsuit, filed in New Jersey, lists BlockFi’s assets and liabilities at between $1 billion and $10 billion each. The company said in a statement that it has about $257 million in cash and is initiating an “internal plan to significantly reduce costs, including labor costs.”
Citing the “lack of clarity” about the bankruptcy status of FTX and Alameda Research, the Jersey City, New Jersey-based company had previously halted withdrawals and said it was exploring “all possible issues.” options” with external advisors.
FTX US is listed on the company’s petition as one of the top unsecured creditors, with a $275 million loan.
The company’s largest unsecured creditor, Ankura Trust Company, owes about $729 million, according to the lawsuit. According to its website, Ankura acts as a fiduciary for BlockFi’s interest-bearing crypto accounts.
BlockFi in July received a funding round from the now-collapsed FTX US and also has mortgaged loans to Sam Bankman-Fried’s trading firm Alameda Research.
The company is the latest crypto firm to seek bankruptcy amid a prolonged slump in digital asset prices. Lenders Celsius Network LLC and Voyager Digital Holdings Inc. also filed for court protection this year.
The case is BlockFi Inc., 22-19361, United States Bankruptcy Court for the District of New Jersey (Trenton).
(Updated with additional details throughout.)
Most Read from Bloomberg Businessweek
© 2022 Bloomberg LP
